Markets likely to get a positive start on supportive global cues

The Indian markets plunged in last session with major indices closing lower by about a percent. The drama regarding the ONGC share auction at last made a investors cautious, initially it was reported that the auction could not receive the full bid, however late in the evening the government said that the sale fetched Rs 12,666 crore and was subscribed almost 98 percent at Rs 295 per share. Today, the start is likely to be in green and the indices may recover supported by the positive global cues.

On the domestic front the auto sector is likely to remain buzzing as majority of the companies have reported increase in their sales in February, showing a revival in the market after prolonged sluggishness. Also, the export oriented companies are likely to rejoice with report of rise in export for the month of January. India’s exports registered a 10.1 per cent growth in January at $25.34 billion. Imports grew at a faster rate of 20.25 per cent to $40.1 billion

However, some fertilizer companies are likely to be in somber mood as the government approved the proposal to bring down the quantum of subsidy on decontrolled fertilizers- phosphatic and potassic - for 2012-13. The Cabinet Committee on Economic Affairs, headed by Prime Minister Manmohan Singh, approved the Department of Fertilizer's proposal to reduce subsidy on P&K fertilisers under the Nutrient-Based Subsidy (NBS) policy.

The US markets closed marginally higher on Thursday on the back of better than expected jobless claims data. However, stocks pared gains slightly after the Institute for Supply Management reported that its manufacturing index dropped to 52.4 in February and the Commerce Department's reading on construction spending dropped 0.1% in January for the first time in six months. The Asian markets have made an all green start on the last trading day of the week, heading for the 11 th weekly advances. Korean market was up as inflation in the country moderated to a 14-month low. On the same time Chinese market moved higher on speculation the government may introduce policies to support economic growth. While, falling EU yields has boosted the Japanese market.

Back home, Fragile Indian stock markets took a nasty laceration on first trading day of March month as position squaring once again remained the order of the day since market participants at large looked to avoid long positions. A day after consolidating around previous closing levels, the frontline indices got pounded by close to a percentage point as macroeconomic concerns played spoilsport leading the local markets to slip below the psychological 17,600 (Sensex) and 5,350 (Nifty) levels. Sentiments remained pessimistic as the weak manufacturing PMI data which indicated that factory activity slowed in February from the previous month when it had accelerated at its fastest pace in eight months, weighed on investors’ mood. Also India’s foreign trade data showed that India’s trade deficit widened to $14.7 billion in January 2012 as exports in dollar terms grew by 10.10% while imports during January, 2012 grew by 20.25%.  Meanwhile, stocks like Neyveli Lingnite, Coal India, NMDC gained in the session after reports that Cabinet has given its nod to the share buyback proposal of public sector companies. Besides, a group of ministers on coal, headed by Finance Minister Pranab Mukherjee, held meeting to decide the fate of eight coal blocks linked to power plants of major companies including Reliance Power, Adani Power, Aditya Birla Group and Essar Energy, among others. On the global front, apart from the overnight decline in US markets after Fed Chairman’s comments, markets in Asia too drifted lower despite the encouraging Chinese and Taiwanese manufacturing PMI reports which indicated that factory activity expanded in February. European stock futures though have rebounded after the dismal opening as strong corporate earnings from some leading blue-chip companies lent support. Moreover, the broader markets after showing some resilience slipped into the negative terrain and settled with moderate losses but outperformed their larger peers. Finally, the BSE Sensex shaved off 168.71 points or 0.95% to settle at 17,583.97, while the S&P CNX Nifty lost 45.45 points or 0.84% to close at 5,339.75.